"While redevelopment takes time and puts pressure on (short-term) earnings, we have to do the right thing with these assets, and the ROI is much greater in redevelopment." The company has announced a redevelopment investment of $189 million and spent $65 million in the first quarter of this year. According to Rubin, the redevelopment return has ranged from 8% to as much as 11%.

"We're not only doing it for the return," Rubin said, "but we're transforming assets that are very well located and can't be replaced." Among the strategies within PREIT's redevelopments is the inclusion of big boxes and restaurants. "In order to expand, a lot of big box retail is realizing it can do it faster and in better locations by moving into existing malls. So, we're moving the boxes in." Restaurants, he adds, bring vibrancy to a center.

Adding a residential component to existing and new properties is also on the PREIT agenda. The first property to add residential is Echelon Mall in Voorhees, NJ, which PREIT acquired from Rouse Co.

"It was the weakest of the six Rouse properties," Rubin said. "We're shrinking the retail," which he said was overbuilt to begin with, and adding 425 residential units through joint venture with a residential developer. "It's a format we like," he said, noting the company would look for other such opportunities.

"With the price of gasoline, we think a lot of people will want to live near major retail, restaurant and entertainment." He acknowledged that mixed-use was "plan B" for Echelon. The first plan focused on retail only, and PREIT entered into an agreement with Wal-Mart. "That met with tremendous opposition from the community. It would have been a major battle and very difficult." Thus, the switch to a town center development of mid-rise residential with retail on the ground floor. In addition, the existing Strawbridge's will become Macy's, and Boscov's will be the other anchor. "The community and politicians are very much in favor of this plan, and we already have approvals," he said.

PREIT has acquired 500 acres in Gainesville, FL for ground-up development in which it will combine about two million sf of retail with residential through a JV with a residential developer. The company expects to break ground within the next 12 to 14 months. "We're not banking land," Rubin said. All the land the company has acquired "was for specific reasons," which are primarily for expansion at existing centers.

Acquisitions are not completely off the table for PREIT. "If we find an opportunistic purchase that is part of a strategic fit for us, we'd look at it. However, in this market a plain vanilla acquisition falls below other investment opportunities," Rubin concluded.